An analysis on the adoption of IFRS 17 and the transparency of financial reporting in insurance companies in Kenya
Date
2021
Authors
Ndeda, Marie Anyango
Journal Title
Journal ISSN
Volume Title
Publisher
Strathmore University
Abstract
This study was carried out to analyse the effect that the adoption of !FRS 1 7 by insurance
companies in Kenya would have on financial reporting transparency. Insurers across the world
and various scholars had raised concerns on the limitations of the current standard being used
(!FRS 4) in insurance accounting. The data used in the analysis was obtained from the financial
statements of 18 insurance companies in Kenya from 2010 to 2019. The dependent variable in
the analysis was a transparency measure represented by R2 obtained from a regression
involving eamings from the current and previous years. The independent variables were the
Contractual Service Margin (CSM), Profit before tax (PBT) and the disclosure intensity
measure. The Ordinary Least Squares (OLS) estimator was used in the analysis. Results from
the analysis showed that CSM unlocked at varying rates and the disclosure intensity measure
under !FRS 17 were statistically significant. All variables had positive coefficients apart from
the disclosure intensity under !FRS 4. The conclusion therefore was, the adoption of !FRS 17
would enhance fmancial reporting transparency if, CSM was unlocked using varying interest
rates, the building block approach was applied and if the disclosure requirements provided by
!FRS 17 were followed
Description
Submitted in partial fulfilment of the requirements for the Degree of
Actuarial Science at Strathmore University